December 20th, 2022 Mortgage Industry Update
The Bank of Canada announced on December 7th that its overnight lending rate will increase to 4.25% from 3.75%. Inflation globally and in Canada continues to rise. Central banks around the world continue to tighten as well. The prime rate has increased to 6.45% from 5.95%. The Bank of Canada suggests that they are now considering whether or not more increases are needed.
Additionally this week:
– Royal LePage: Aggregate housing prices are only forecasted to drop 1% in 2023 from $772,900 to $765,171. Single-family detached housing expected to drop 2% from $797,200 to $781,256. Condominium prices will increase by 1% year over year, from $563,300 to $568,933.
– Statistics Canada: Household debt-to-income ratio spiked to 183% during Q3. Was significantly higher than 177% ratio seen in 2021, and veering close to record high of 184.6% seen in 2018. Net worth per capita fell by 3.8%.
– Statistics Canada: Total value of building permits in Canada declined by 1.4% in October to $10 billion. Total value of residential permits fell by 6.4% to $6.5 billion. Number of new residential units experiencing a similar 4.6% decline during the same month.
– The value of mortgages in the domestic businesses at Canada’s six largest banks totaled $1.36 trillion in the fiscal fourth quarter ended Oct. 31, up 1.6 per cent from the previous three months. That was the slowest quarter-over-quarter growth since 2020’s second fiscal quarter.
– RBC: Number of Canadians renting has increased at almost three times the rate of homeowners over the past decade. Per 2021 Census, number of renting households went up from 4.1 million in 2011 to nearly five million last year. Number of renters grew by 876,000 households (or 22%).
– Equifax: Canadians had a collective $2.36 trillion in total consumer debt in the Q3. Marks an increase of 7.3% annually. Canadians charged an average of $2,447/month on their credit cards, a 17.3% increase from Q3 2021 and a 21.8% rise from the pre-pandemic level of Q3 2019.
Stay tuned for the next update!
For any questions and concerns please do not hesitate to call Harpreet Singh The Mortgage King at (416) 795-1919.
